Mobile Homes Act 2013

Lord Best Excerpts

Monday 21st July 2014 Grand Committee

[Lord Best (CB)]

My Lords, I am very grateful to the noble Lord, Lord Graham of Edmonton, for providing us with this chance to consider the position of mobile home owners following the enactment of the Private Member’s Bill which I had the honour of taking through your Lordships’ House. I pay tribute to the noble Lord’s many years of tenacious campaigning on behalf of mobile home—or park home—residents. I took on the Mobile Homes Bill entirely because of my admiration for the noble Lord’s tireless work.

I also want to record my appreciation for Peter Aldous MP, who piloted the legislation with great skill through its stages in the other place. In noting the all-party nature of parliamentary backing on this issue, I also thank Annette Brooke MP, joint chair of the relevant APPG, for her persistent support. In addition, we all owe a debt of gratitude to the hard-working civil servants who have handled all these difficult issues over many years with great skill.

There is no doubt that the Mobile Homes Act 2013 has righted some terrible wrongs and is a landmark for the thousands of residents of mobile homes who faced grave injustices from the evil practice of so-called “sale blocking”. When I got involved with these matters and talked to residents in their homes, I was deeply shocked to discover the appalling behaviour of certain site owners. These had acquired the freehold ownership of sites—some of which were previously quite idyllic little rural communities—and set about exploiting, harassing and intimidating residents, making huge fortunes from acquiring their homes at knockdown prices and selling on at huge profits. Not only that, but services on sites were neglected; the service charges—pitch fees—were exorbitant; and peaceful communities of older citizens suddenly became places of fear, insecurity, danger or even violence.

I believe that the Act has been a power for good both in outlawing sale blocking and in introducing licensing arrangements that, with proper opportunity for appeals to the First-tier Tribunal, mean that pitch fees must be reasonable and site owners must manage their sites effectively. It is gratifying to note that, in most cases, site owners are now using the standard forms recommended by the Department for Communities and Local Government for their agreements with residents on pitch fees.

So far so good, but we always knew that the Act could not do everything, and park home residents still face serious challenges. I shall set out four areas for further action by the Government. I hope that they may be addressed not by another Private Member’s Bill, as it is difficult to get time allocated to such Bills, but by primary government legislation—particularly when the next housing Bill is prepared.

First, when the Mobile Homes Act was a Bill, we recognised that it could not cover the separate but related issue of excessive charges by site owners controlling the supply of liquid petroleum gas—LPG, often calor gas—distributed to residents’ homes. We heard of cases where the site owner, holding residents to ransom, charged double the sum he paid to the liquid gas suppliers. Similar problems with piped gas, electricity and water were the subject of an Upper-tier Tribunal case last year. The tribunal has outlawed such profiteering from the supply of those utilities—although the worst site owners still ignore those rulings—but many sites depend on LPG, and exploitation through controlling that source of heating can mean fuel poverty for elderly residents. Action is needed.

Secondly, the Act makes provision for a review of whether a fit and proper person requirement should be introduced to debar the real gangsters and profiteers who have moved in on this lucrative opportunity to exploit older people. Ministers have said that this exercise will not be undertaken until 2017. In the mean time, some sites remain in the ownership of some pretty unsavoury characters. It is surely unwise to allow those who are serving prison sentences, those with criminal records, bankrupts, those who have been found seriously wanting by a First-tier Tribunal and other undesirable speculators to be awarded licences to manage park home sites. Although the Act may have chased out some of those operators, some offenders have remained in control of sites. It is open to the Government of the day at any time to bring forward the necessary statutory instrument that would require site owners to be fit and proper persons. I urge that process to be pursued as soon as possible.

Thirdly, there is the question of holiday homes being used as permanent residences and occupied on virtually the same terms as other mobile homes, but falling outside the important protections of the Mobile Homes Act. Clearly, genuine holiday homes serve an important function and help local economies, but if some so-called holiday homes are in reality permanent retirement homes, with the protections afforded to other park home occupiers being avoided simply by requiring residents to take an annual holiday elsewhere, surely they should be brought within the scope of the 2013 Act. This is unfinished business, which a forthcoming housing Bill needs to address.

Finally, there is the issue of the 10% sales commissions—payments to the site owner when a resident sells. That was the subject of the rally which the noble Lord, Lord Graham, mentioned, when hundreds of park home owners came to Parliament earlier this month. I am familiar with the concept of exit fees—typically of 1% of sales proceeds—paid by outgoing leaseholders in many retirement housing schemes. The Office of Fair Trading, just before its demise, condemned this practice whereby the money raised was not used to improve the housing or top up “sinking” funds, which provide for future major repairs. The OFT opposed exit fees that were not used to keep down monthly service charges but instead simply represented a windfall gain for the freeholder. I suggest that the same approach should be applied to 10% sales commissions required by owners of mobile home sites. If the sales commission is used to enhance conditions on the site—improve roads, plant trees, upgrade electricity supply lines et cetera—then everyone benefits. The value of a park home may be 10% higher where the quality of a site is kept up to good standards. This suggests that the charge could pay for itself. All occupiers then enjoy better facilities and the site owner benefits, too, because his commission is 10% of a higher sum.

Conversely, if the site owner pockets the commission and neglects his duties, and the site deteriorates, he does not justify extracting a substantial commission. Indeed, I am told that there are cases in which the site owner deliberately runs down the conditions on the site in order to put pressure on the mobile home owners to leave so that more sales, more commissions, will flow in. That is a travesty.

Now that local authorities are being resourced—I hope adequately—to ensure that licence-holders are doing what they should, the proposition from campaigners like Tony Turner in Cornwall deserves to be progressed. They want to align the requirement to pay a large commission to the quality and quantity of time and money invested in the site by its owner. Paying for something rather than paying for nothing changes the picture considerably. A change to make 10% commissions conditional on performance requires primary legislation. However, means of implementing a change seem to be in place already. Local councils would have to be satisfied with the condition of the site and its management before allowing commissions to be demanded. That certainly looks like a priority for legislation when the chance arises.

I conclude by underlining the appreciation of all those concerned with the fate of mobile home occupiers for the sterling efforts of legislators, civil servants, campaigners and residents’ associations but, above all, for the life’s work of the noble Lord, Lord Graham of Edmonton.

[Lord Graham of Edmonton]

Hear, hear!